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Casting a Worldwide Net: How Litigation Funders Can Leverage Europe’s New Unified Patent Court

March 14, 2023

Casting a Worldwide Net: How Litigation Funders Can Leverage Europe’s New Unified Patent Court

The following article was contributed by Lionel Martin (Partner, August Debouzy), Pierre-Olivier Ally (Counsel, August Debouzy), Ben Quarmby (Partner, MoloLamken LLP) and Jonathan E. Barbee (Counsel, MoloLamken LLP).  Europe’s Unified Patent Court (UPC) is on the cusp of launch, confirmed for this June 1, 2023.  It has been eagerly anticipated by the patent litigation community across the member states—starting with 17 European countries, but expected to extend rapidly to all of Europe minus Poland, Spain, Croatia, and, most notably, the UK. The UPC has been long in the making: over ten years have passed since the agreement was first signed.  What is to be expected of this new court, and what opportunities does it present for litigation funders? Uniformity and Scale.  The principal goal of the UPC is to offer a single, consistent, and coherent court system in Europe for the litigation of patents.  Historically, procedural differences in the member states’ national patent and court systems meant that the timeline of patent litigation could vary wildly from one jurisdiction to the next.  The jurisdictions also differed on substance: infringement, validity, and injunctive relief rulings were not consistently applied across the board.  And the one way in which the national jurisdictions were similar—comparatively low damages models—acted as further disincentive for patent owners looking to enforce their rights. The UPC promises to overhaul that system entirely.  It is expected to issue speedy judgments on both infringement and validity.  It should set the scene for damages verdicts that are not only more consistent across jurisdictions, but also generally much greater in size—as one would expect for verdicts covering at least 17 member states.  And it promises greater accessibility and uniformity insofar as English will be the preeminent language of infringement proceedings in any matter involving allegations of infringement extending beyond a single member state. The UPC must now live up to that promise, and there is some uncertainty as to how the system will play out in its early stages.  Will the court be able to keep up the expected pace?   What standards will the court rely on when imposing preliminary injunctions?  How will damages awards be limited or expanded?  How will the appellate process work?  How will early litigants help shape the law and jurisprudence of the UPC? Those questions and many more will have to be answered in the coming months and years.  But if the UPC delivers on even part of its promised mandate, it may represent an exciting new arena for litigation funders working with patent owners to enforce their rights.  Indeed, there is reason to believe that the court will strive to be patentee-friendly—at least at the outset—in order to attract its “customers”. Opportunities for Litigation Funding.  Many of the key features of the UPC as currently contemplated, align neatly with the incentives and priorities of litigation funders and patent owners.
  • Broader Geographic Reach. The UPC makes multi-jurisdictional patent campaigns cost-effective and efficient by allowing plaintiffs to target infringement across at least seventeen countries in one court proceeding.  Plaintiffs no longer need to pick and choose the countries in which to enforce their patents.  The reach of the UPC is likely to expand further: the UPC is expected to be integrated into European mutual recognition mechanisms that will allow the UPC’s jurisdiction to extend not only to the EU but also to Switzerland, Norway, and the UK.  While these mutual recognition mechanisms have long existed, national courts have historically been reluctant to rely on them.  The UPC, by contrast, is expected to do so much more regularly.
  • Reduced Transaction Costs. Reliance on a single proceeding across multiple countries will cut down on the costs of litigating in multiple European countries in parallel.  The UPC will therefore dramatically reduce the resources necessary to launch and maintain a multi-jurisdictional campaign in the EU.  The UPC will also cut down on the logistics and transactional costs associated with such campaigns.  A plaintiff, for example, no longer needs to hire three separate teams to enforce patents in, for instance, France, Germany, and Italy, and pay additional fees for those three teams to coordinate to ensure coherence across jurisdictions.
  • Short Time to Trial. UPC proceedings will expedite the pace of patent campaigns.  Some commentators suggest that proceedings will only take 12-15 months from complaint to final ruling—a significant boon for patent owners looking to promptly and efficiently enforce their rights.  If this holds true, and if sustainable, this pace would rival the speed of some of the fastest dockets among U.S. district courts.
  • Efficient Evidence Gathering Procedures. Unlike the U.S., there is no formal discovery in the UPC, which significantly reduces litigation costs and can expedite proceedings.  But the UPC offers several key features that will be of value to patent owners: (i) plaintiffs may move to seize evidence of infringement from a defendant’s premises, and (ii) they may obtain court orders to force defendants to produce documents.
  • Larger Damages Awards. Since UPC judgments will cover more countries and consumers, the potential damages awards should be considerably larger than they would be in a single jurisdiction.  This should help drive up the value of settlements, and put more pressure on defendants to settle earlier.  It also radically tips the scale on the economics of patent litigation funding in the EU.  Suddenly, the EU becomes an attractive venue in-and-of-itself for funders—not just an ancillary venue in support of higher-stakes U.S. litigation.
  • Broad Injunctive Relief. The UPC will allow patent holders to seek injunctive relief across multiple countries in one shot.  This too should help drive bigger and earlier settlements—a boon for funders looking for a rapid return on their investment. 
  • High-Quality Decisions. It is expected that the Court will render first-rate decisions for two principal reasons: (i) it has attracted seasoned IP judges from across Europe, and (ii) the judges consist of a mix of legally and technically qualified judges.  Furthermore, due to the high specialization of the Court, the number of judges will be quite limited (<100), which may help contribute to greater respect for precedent from fellow judges, which in turn leads to greater predictability for litigants.
Will the UPC be able to deliver on all of these fronts?  Only time will tell.  But for a savvy funder looking for an early mover advantage in a relatively underdeveloped market, and with the opportunity to potentially help shape early UPC jurisprudence in ways that will benefit patent owners for years to come, these are exciting times indeed . . . .

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Commercial Deals

Slater and Gordon Secures Renewed £30M Financing with Harbour

By John Freund |

Slater and Gordon has announced the renewal of its committed financing facility with Harbour, securing an enhanced £30 million loan agreement that strengthens the firm’s financial position and supports its ongoing strategic plans.

According to Slater and Gordon, the facility replaces the previous arrangement and will run for at least three years, underscoring the depth of the relationship between the firm and Harbour, a long-standing provider of capital to law firms.

The renewed financing follows a £30 million equity raise earlier in 2025 and is intended to provide financing certainty as Slater and Gordon continues to invest across its core practice areas and enhance its client service offering. Chief executive Nils Stoesser highlighted the progress the business has made in recent years and said the renewed facility provides confidence as the firm pursues its longer-term strategic priorities.

Ellora MacPherson, Harbour’s managing director and chief investment officer, described the commitment as the next stage in a constructive and established partnership. She noted Harbour’s support for Slater and Gordon’s ambitions, particularly around improving service delivery and outcomes for clients.

Over the past two years, Slater and Gordon has focused on strengthening its family law, employment, and personal injury practices, while also expanding its capacity to handle large-scale group actions. The firm has also continued to invest in technology and operational improvements aimed at improving the overall client experience.

Commercial

Litigation Finance Faces Regulatory, MSO, and Insurance Crossroads in 2026

By John Freund |

The litigation finance industry, now estimated at roughly $16.1 billion, is heading into 2026 amid growing uncertainty over regulation, capital structures, and its relationship with adjacent industries. After several years of rapid growth and heightened scrutiny, market participants are increasingly focused on how these pressures may reshape the sector.

Bloomberg Law identifies four central questions likely to define the industry’s near-term future. One of the most closely watched issues is whether federal regulation will finally materialize in a meaningful way. Legislative proposals have ranged from restricting foreign sovereign capital in U.S. litigation to taxing litigation finance returns. While several initiatives surfaced in 2025, political gridlock and election year dynamics raise doubts about whether comprehensive federal action will advance in the near term, leaving the industry operating within a patchwork of existing rules.

Another major development is the expansion of alternative investment structures, particularly the growing use of management services organizations. MSOs allow third party investors to own or finance non legal aspects of law firm operations, offering a potential pathway for deeper capital integration without directly violating attorney ownership rules. Interest in these models has increased among both litigation funders and large law firms, signaling a broader shift in how legal services may be financed and managed.

The industry is also watching the outcome of several high profile disputes that could have outsized implications for funders. Long running, multibillion dollar cases involving sovereign defendants continue to test assumptions about risk, duration, and appellate exposure in funded matters.

Finally, tensions with the insurance industry remain unresolved. Insurers have intensified efforts to link litigation funding to rising claim costs and are exploring policy mechanisms that would require disclosure of third party funding arrangements.

Taken together, these dynamics suggest that 2026 could be a defining year for litigation finance, as evolving regulation, new capital models, and external pushback shape the industry’s next phase of development.

Commercial Regulatory Issues

Liability Insurers Push Disclosure Requirements Targeting Litigation Funding

By John Freund |

Commercial liability insurers are escalating their long-running dispute with the litigation funding industry by introducing policy language that could require insured companies to disclose third-party funding arrangements. The move reflects mounting concern among insurers that litigation finance is contributing to rising claim costs and reshaping litigation dynamics in ways carriers struggle to underwrite or control.

An article in Bloomberg Law reports that the Insurance Services Office, a Verisk Analytics unit that develops standard insurance policy language, has drafted an optional provision that would compel policyholders to reveal whether litigation funders or law firms with a financial stake are backing claims against insured defendants. While adoption of the provision would be voluntary, insurers could begin incorporating it into commercial liability policies as early as 2026.

The proposed disclosure requirement is part of a broader push by insurers to gain greater visibility into litigation funding arrangements, which they argue can encourage more aggressive claims strategies and higher settlement demands, particularly in mass tort and complex commercial litigation. Insurers have increasingly linked these trends to what they describe as social inflation, a term used to capture rising jury awards and litigation costs that outpace economic inflation.

For policyholders, the new language could introduce additional compliance obligations and strategic considerations. Companies that rely on litigation funding, whether directly or through counterparties, may be forced to weigh the benefits of financing against potential coverage implications.

Litigation funders and law firms are watching developments closely. Funding agreements are typically treated as confidential, and mandatory disclosure to insurers could raise concerns about privilege, work product protections, and competitive sensitivity. At the same time, insurers have been criticized for opposing litigation finance while also exploring their own litigation-related investment products, highlighting tensions within the market.

If widely adopted, insurer-driven disclosure requirements could represent a meaningful shift in how litigation funding intersects with insurance. The development underscores the growing influence of insurers in shaping transparency expectations and suggests that litigation funders may increasingly find themselves drawn into coverage debates that extend well beyond the courtroom.